Information for Departments
When a department decides to hire an NRA who is already present in Columbia, all routine "new hire" paperwork should be completed with no delay. During the on-boarding process, when a new employee who is not a US citizen or a lawful permanent resident completes the I-9 and chooses "alien authorized to work," that becomes their citizenship status in PeopleSoft and locks the W-4 to withholding allowances to the IRS requirement of "single,0." If the employee is eligible for different allowances, this is done during the tax assessment appointment.
- There is no requirement to have a Social Security Number (SSN) at the time of hire for a newly-arrived NRA. (HR-105 makes an exception for newly arrived nonresident aliens.)
- The new employee must e-mail the MU Nonresident Alien Taxation Specialist, as soon as they have an SSN.
- The e-mail subject line will read, "New employee" and the body of the message should include the employee's full name (as in the passport) and several suggested times and days the employee is available for an appointment.
- The employee will then receive an e-mail with the appointment time, directions to the office, and instructions about what to bring to the appointment.
Honorarium Payment Procedures
Before arrival of the NRA, departments should contact the NRA Tax Office by email. Please add the visitor's name to the "Honorarium recipient" subject line to allow more effective communication. Please include in the email general information about the NRA and the nature of honorarium payment(s). This will maximize tax benefits and allow anticipation of withholding amounts by both the department and the NRA. Withholding on honorarium payments made to nonresident aliens will be 30% in the absence of tax treaty benefits.
Departmental Payments to NRAs Through Accounting
Accounting will not process any payments for nonresident aliens except those that are for a reimbursement of business-related expenses in accordance with the "accountable plan." All payments made to nonresident aliens other than wages and scholarships paid through Financial Aid must go through the Nonresident Alien Taxation Specialist and are to be submitted on the forms UM376A (Non-Employee Alien PAF) and UM140 (On-Line Check Request). See procedures for scholarship, prize, and honorarium recipients below.
There are currently two mechanisms to provide NRA scholarship payments at MU. Departments submit the scholarship information to Financial Aid so the amount is applied directly to the student account (myZou), or departments complete forms UM376A and UM140 (for UM-140 instructions, see below) and submit to the NRA Taxation Specialist so the payment is processed through PeopleSoft Payroll. This is for scholarship recipients who are not enrolled students and for some student payments that departments choose to process outside of myZou.
Nonqualified scholarships are taxable income to both nonresidents and U.S. students. A taxable scholarship is any amount greater than the semester academic fees or amounts provided directly to the student in the form of cash or a check. Nonqualified scholarships made to NRA students who have completed the tax assessment process will generally be taxed at a maximum of 14% unless a tax treaty exemption applies. If there is no tax assessment on file, withholding may be as high as 30%.
All NRAs with taxable scholarship income will be contacted by the NRA Tax Office after the appropriate departmental paperwork is on file.
Prizes and Awards
Prizes and awards are always considered U.S. source income for NRAs, and withholding of U.S. taxes is required at 30% unless a tax treaty applies and the recipient has either a U.S. Social Security Number or Individual Taxpayer Identification Number (ITIN).
Recipients can contact the NRA Tax Office by e-mail from anywhere in the world, and will subsequently submit copies of passport and identification documents via fax (573) 882-4453 or by e-mail as a scanned attachment.
Gross-Up Formula: Departments have the limited option of "grossing up" the payment to provide the contracted amount to the NRA. The amount is calculated by multiplying the contracted amount by 1.428572. This is recommended only in unusual circumstances (i.e. the presentation is made outside of Columbia so the NRA cannot meet with the Tax Specialist).
The NRA must contact the NRA Tax Office The body of the e-mail must contain the following information:
- Visitor's name (as in the passport)
- Date of birth
- US Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN), if available (this can be faxed if the visitor is concerned about sending the number via e-mail)
- Country of citizenship
- Country in which living at least one year prior to arrival in the USA for this trip (often the same as citizenship)
- Complete mailing address in the home country
- Passport number
- Passport expiration date
- Anticipated arrival date for this visit
- Anticipated departure dates after this visit anticipated visa type, if known
- Anticipated visa type, if known
If the visitor has been in the USA in F, J, M, or Q immigration status, the immigration statuses and dates of those prior visits should be provided as accurately as possible back to January 1, 1985.
An appointment must be scheduled with the NRA Taxation Specialist and the NRA during their stay on campus. The NRA must bring the following documentation to the appointment:
- Passport and all immigration documents (to verify eligibility for honorarium payment).
- Evidence of SSN or ITIN.
Prior to the arrival of the NRA, if possible, the department must submit to the NRA Taxation Specialist the following documentation:
- A copy of the contract signed by both Business Services and the NRA (if the amount of the honorarium requires a contract).
- A completed UM376A (no voucher is required for payments of this type). This PAF for non-employed Aliens allows a payroll record to be created from which the honorarium will be paid.
- A completed UM140 on-line check request.
During the tax assessment appointment, eligibility for tax treaty and other exemptions will be determined and appropriate forms will be printed, signed by the NRA, and forwarded to the IRS as needed.
Honorarium payments may be made only to a nonresident alien who is in an immigration status that legally allows such payments. These statuses generally include persons in B-1, B-2, WB, and WT status.
Completing Form UM140
- Leave the Empl ID blank if there is not an existing Empl ID or Student Number.
- For honorarium, non-myZou scholarship, and other income (prizes, awards)
- *Date payment to be issued is the date the check may be provided to the nonresident alien.
- *Funding department DeptID is the 7-digit code the begins with "C" for the MU campus.
- *Business Unit is already set as COLUM for the MU campus. If another business unit is making the payment, contact the NRA Tax Office for information.
- Job Code (Field 10) will always be 9888 - do not change this.
- The MoCode must have "payroll" turned on, or the payment will not be processed.
- Account (Second part of Field 11) will always be 708000
- Earnings Code is set according to the type of payment requested
- ASC for scholarships (alien scholarship)
- AIC for honoraria (alien independent contractor)
- AOI for prozes and awards (alien other income)
- Payment Amount is the total payment requested, before tax but after the gross-up formula has been applied. (Gross-up is always a department option.)
- Taxes will be automatically calculated
- For repeat payments to the same individual, (i.e. monthly scholarship payments) one Form UM140 may be used with multiple lines (one for each payment).
Send the completed form to the NRA Tax Office as an Excel spreadsheet email attachment.
Contact the NRA Taxation Specialist to schedule a presentation for department or division personnel that is tailored to your NRA needs.